Chrysler To Idle Four S. Florida Dealers

Chrysler plans to eliminate a quarter of its nearly 3,200 U.S. dealers - four in South Florida - by using the bankruptcy process to break their contracts with the automaker and put them out of business by June 9.

Seven of the 789 dealers, including two locally, are owned by Fort Lauderdale-based AutoNation Inc., the nation's largest automobile retailer, according to a Chrysler filing Thursday in bankruptcy court in New York.

AutoNation said in a statement that its dealers Chrysler wants to eliminate represent only 1 percent of its 2008 operating income.

Chrysler's decision, which had been expected, could cut tens of thousands of jobs and reduce tax revenue for municipalities around the nation. The automaker has said that having too many sales locations hurts profits for its dealers, and thus degrades the quality of customer service and keeps showrooms from being updated.

"We're working diligently to place all of our associates [in other locations] where possible," AutoNation spokesman Marc Cannon said.

Chrysler sent letters Thursday to all of the dealers affected, informing them that the bankruptcy petition it filed three weeks ago allows it to end the dealer contracts. Chrysler is being merged with Italian automaker Fiat as part of the bankruptcy process and is escaping billions of dollars in debt and obligations to the United Auto Workers union.

Dealers will be closed in every state except Alaska. In Florida, Chrysler intends to shut 32 of its 114 dealers. Locally, the four being idled are Maroone Chrysler Jeep Dodge in Coconut Creek, Maroone Dodge of Miami, Monarch Dodge in Lauderdale Lakes and Tamiami Chrysler Jeep Dodge in Miami.

"It's just wrong. They're terminating one of the best dealers they've had in 35 years," Monarch President Mark Hodos said.

Monarch's staff of more than 60, would be unemployed if the court approves Chrysler's request.

Nationwide, Chrysler said it would keep its remaining 2,392 dealers and that it would ask them to purchase the unsold inventory - amounting to 44,000 cars and trucks - held by the dealers marked for elimination.

"We do not have enough production or sales to keep all the dealers alive, based on the size of the market that's available to us," Chrysler Vice Chairman Jim Press said.

He said the dealers being cut represented only 14 percent of Chrysler's total sales, and that half of that group sold fewer than 100 cars a year.

General Motors Corp., which has said it is likely to seek court protection, is expected to notify today as many as 1,200 of its dealers that it will not renew their franchises.

Both GM and Chrysler have repeatedly said they have too many dealers. Toyota, which in 2008 sold one-third more autos than Chrysler in the United States, has just 1,400 dealers.